Scorching temperatures and strong winds fuelled a return to extreme bushfire conditions across much of Australia’s south east.

In Victoria’s Gippsland region, the Country Fire Authority was battling a 45,000 hectare fire that has destroyed at least five homes and was menacing the towns of Lake Glenmaggie, Dawson, Glenmaggie, Heyfield and Seaton.

The township of Licola was isolated by bushfires. The CFA issued an emergency warning at 2.45pm Friday, predicting fire could hit the town between 4.00pm and 6.00pm.

Ray Winter, from the Licola General Store, said around 10 locals were left in the town along with about 30 firefighters.

"We can see smoke in the distance," said Mr Winter, 63. "We're bracing ourselves. We're in the lap of the gods with the wind. It all depends on the wind."

Mr Winter said a bushfire had passed through the town before, in 2006. "We've been through it all before," he said. "We're prepared, we've got everything all wet down. We've got a good refuge – a dwelling and a big oval. We'll go in the dwelling first and if it gets too hairy we'll make ground to the oval.

"The oval's all green. It's been sprinkled. Hopefully we'll be safe."

Alison Acres, from the Timberline general store in Heyfield, said three people came in to the store saying they had lost their homes.

"It’s pretty dark here, it’s pretty scary actually," she told radio station 3AW. "We’ve had alerts going since 2.30 this morning because we’ve been under ember attack, with fires striking up all around."

In NSW, blistering temperatures have seen serious fires flare on the outskirts of Cessnock, in the NSW Hunter Valley and near Young, to the state’s south. Emergency warnings were issued for both fires shortly after lunch on Friday.

Elsewhere, a massive fire near Coonabarabran broke containment lines, threatening a number of isolated properties.

Weatherzone meteorologist Ben McBurney said extreme heat was likely to linger over eastern Australia for the remainder of Friday, with a cool change expected later that night.

Sydney hit record high temperatures with a top of 45.8 degrees at 2:54pm, making it the hottest day since January 1939.

Many parts of NSW were hovering around 45 degrees at lunchtime as a fiery air mass from inland Australia moved over the state, pushing the mercury well above the forecast maximum.

Weatherzone meteorologist Ben Domensino said Friday's heatwave could topple a number of records.

"Reduced cloud cover over central and western Australia during the past few weeks has allowed a very hot air mass to build,” he said.”This heat has periodically made its way towards the nation's coast due to the passage of low pressure troughs across the nation's south."

In Sydney, the original forecast was a maximum of 39 degrees on Friday in the city but by 12.30pm the mercury already had reached a stifling 43.3 degrees at Observatory Hill, climbing to 45 degrees at 1.43pm, 45.2 degrees at 1.58pm and 45.3 degrees at 2.27pm.

Just after midday at Wilcannia Airport in the state's west, the temperature hit a scorching 44.9 degrees. Not far behind it were Albion Park, in the Illawarra, and Condobolin in the central west, which both registered 44.8 degrees just after midday.